Central regions | Finance, business | Technology & innovation

Moscow citys seed fund teams up with VCs and angels to support innovation

18 Jul '12
East-West Digital News, the international resource on Russian digital industries, reported earlier this week that the Moscow Seed Fund, a fund set up by the Moscow government to promote venture investment in local startups, announced earlier this month its decision to provide loans to innovative companies co-invested in by venture funds and business angels.

A list of 12 such co-investors, picked on a tender basis, was approved by the fund. Among them areProstor Capital, Rye, Man and Gore Securities, Pavel Cherkashin, and Igor Ryabenkiy.

Under the terms of the offer, the Moscow Seed Fund will fork out up to 8 million rubles, approximately $246,000, in 12% loans to back companies that receive investments from the 12 tender winners. The latter can make independent decisions regarding investments, but, to be eligible for government co-financing, they are not expected to put up more than 30 million rubles, or approximately $923,000, per investor.

Describing the domestic venture market, Andrey Vvedensky of the Russian Venture Company, a state-owned fund of funds dedicated to innovation and one of the Funds partners, underscored the current lack of seed capital and pre-seed investments for innovative local companies, and he also noted that business angel investing in Russia is still in its infancy. Moscow Seed Funds Executive Director Alexey Kostrov hopes the new program will help scale-up business angels and VC funds involved in early-stage investing, thus enhancing Russias innovation ecosystem.
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